Why concierge medicine will get bigger

Practices could shield patients from health-care turmoil

If you’ve joined a concierge medical practice, recent trends in the worlds of health care and insurance may have you feeling good about your decision. If you haven’t signed up with one of these practices—also called “boutique,” “personalized” or “private-physician” practices—some of those same trends may lead you to consider it down the road.

Certainly, plenty of baby boomers have done the math and deemed the investment worthy. In the typical concierge experience, a primary-care doctor accepts insurance for routine services but also charges a non-reimbursable fee that pays for amenities like 24/7 access to the doctor, same-day appointments, longer appointment times and a greater degree of personalized attention. The annual fee for such practices currently averages about $1,800.

Now that the business model has been around for a while, more patients are saying that it involves less stress than a traditional medical practice. What’s more, two recent studies that tried to measure the health impact of one popular concierge model found its patients had lower hospitalization rates and other benefits.

The approach has its critics, with some arguing that concierge medicine exacerbates the disparities in care between the haves and have-nots. But for people with the resources to afford it, the boutique-practice model clearly has a growing appeal.

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While the number of concierge doctors remains small, it’s growing at a rapid clip. In the U.S., there were about 4,400 private physicians in 2012, a 25% increase from 2011, according to the American Academy of Private Physicians. That’s out of some 600,000 practicing doctors nationwide. At an average of roughly 350 patients per concierge doctor, that means more than 1.5 million Americans are under the care of a physician who provides an additional level of service in exchange for a fee.

Concierge medicine’s perceived advantages will only grow in the coming years, experts say, as the traditional health-care system becomes even more strained. The full implementation of the Affordable Care Act next year is expected to bring more than 20 million formerly uninsured patients into the health-care system through 2022, exacerbating an existing physician shortage.

What’s more, proposed changes to Medicare could cut doctors’ reimbursements, further squeezing their revenue. Concierge doctors make the case that their fee cushions them, and by extension their patients, from these changes looming on the health-care horizon.

A buffer from Medicare cuts

That’s an argument that could be particularly persuasive to those approaching retirement—and Medicare eligibility. As one of the biggest recipients of federal tax dollars—the government spent $486 billion on Medicare in 2011, according to the Center on Budget and Policy Priorities—Medicare is vulnerable to cuts as part of any congressional effort to trim the budget deficit.

Proposed changes to the program include raising the eligibility age and implementing more income-based pricing. The government could also decide to reimburse doctors even less for their services. As it stands, Medicare these days usually pays doctors only enough to meet their overhead—that is, to pay the rent, support staff and other expenses—with little left over for the doctors’ salary, said Jeffrey Milburn, a consultant in the Health Care Consulting Group of the Medical Group Management Association, a trade group for medical practice managers.

Many concierge doctors accept Medicare, but they say they don’t rely on it to meet their costs. That’s a good position to be in, said Dr. Gary W. Dorshimer, who recently switched his practice at the University of Pennsylvania Health System over to a concierge system. The annual $2,500 fee he charges his patients will help offset any cuts in Medicare reimbursement, he noted.

Penny DelGaudio, 69, a Medicare recipient and longtime patient of Dr. Dorshimer’s, decided to make the transition with him. “I don’t consider myself wealthy,” said DelGaudio, a real estate agent in Medford, N.J. But she and her husband decided the $5,000 annual cost for the two of them was worth it, for the increased access to the doctor, shorter wait times, and insulation from future health-care changes.

Recently, some in the industry say, personalized-medicine patients have also been insulated from health-care inflation, at least when it comes to their annual retainer. Fees have been “incredibly stable,” according to the American Academy of Private Physicians, and the industry’s largest network, MDVIP, a unit of Procter & Gamble, has kept its fees essentially flat since 2007. (Patients’ insurance premiums, of course, have generally risen over the same period.)

Spending more to buy face time

Concierge practices rely on a simple equation: more money for the doctor equals more time for the patient. Many private doctors have rosters of as few as 300, compared with 2,000-plus in a traditional practice. While most boutique-medicine doctors say they’re open to more patients, experts say they’ll typically cap their practice at 500 or 600.

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